February 21, 2017 |

3 Pro Tips for Taking a More Profitable Inventory

By Press Release

You can’t afford to slip up when it comes to inventory.

16% of your food ends up in the trash.

75% of your employees steal from you.

30% of your expenses go toward food costs.

These stats proves that not paying attention to inventory can mean big problems for small pizza restaurants. When your profit margin is 5-10% at most, losing even $100 a month is brutal on your budget.

And the loss is even more dramatic for larger pizza operations.

Bungled inventories can quickly lead to thousands of dollars in loss and jeopardization of the business as a whole.

When done wrong, you lose thousands of dollars.

When done right, you can increase profits by up to 24% a year.

Because proper inventory management can make or break your business, here are three pro tips to get started… and make sure you get the most out of your inventory taking.

#1 Treat It Like Cash

You pour your money into the food sitting on your shelves.

So why aren’t you treating it like the cash that it is?

You always want to keep enough on hand to cover your service. But you also don’t want to keep too much on hand that you don’t have enough money to cover other expenses.

One way to hack this is to limit how much inventory you keep on hand. A good rule of thumb is to keep it to 1.5 times your weekly Cost of Goods Sold.

For example, if you bring in $20,000 a week in sales with a COGS of 25%, you’re using up $5,000 in inventory on a weekly basis.

Take an inventory count to calculate the dollar amount of what you have on hand. In this case, if it’s more than $7,500… you’re just letting $2,500 in cash sit on your shelves.

Frequency and consistency of inventory taking is important, too.

Weekly inventories are a must to keep a finger on the pulse of your COGS. You’ll be able to see right away if your numbers are off.

Daily counting of your costliest items can be even more productive.

Just choose your 4 most important items (e.g. mozzarella cheese, tomato sauce, flour, pepperoni) or 4 items you’ve seen shrinkage on recently.

The more frequently you count and get your COGS, the faster you can stop waste and theft.

#2 Get Your Staff On Board

Many experts recommend assigning and training a couple members of your staff to handle inventory. This presents a lot of benefits like a speedier process as these team members become more and more familiar with it.

But there’s a lot more to it than that.

Getting two people on your team to be excited about inventory taking – when they could be making tips or creating their favorite dishes – is nearly impossible.

But what if your whole team was on board?

Teaching your entire staff to value inventory erases the stigma about the undesirability of this process.

Many people on staff just don’t understand what inventory is and the reason you do it. Show your staff how proper inventory management ties directly to the success of their job by keeping the restaurant in business.

After all, not having enough on hand means you could lose business.

Having too much on hand means you may not have enough to pay them at month’s end.

And when it comes to theft, even something as seemingly harmless as nabbing a box of pasta can harm the profitability of the restaurant.

In addition to warning staff about the negative effects of not taking inventory, offer incentives for the most efficient and money-saving inventory takers. This can create an atmosphere of healthy competition among staff members for not only taking inventory… but doing it well.

#3 Don’t Underestimate Inventory Technology

The proliferation of mobile apps today is turning inventory management on its head.

Software and apps make inventory taking easier and more affordable. And they also make the resulting data more understandable and useful.

Sure, you could stick with the error-ridden spreadsheets and data entry commonly associated with inventory. Or you could go with outdated, clunky on-premise solutions that cost you a fortune.

Let’s face it, though… both of these options are time-consuming and painful.

That’s where inventory technology comes in.

The state of restaurant inventory gives you a wide array of software and apps to choose from.

These apps let you take a complete inventory count without the spreadsheets, data entry, and manual price lookup. Shelf-to-sheet inventory guides reduce the time your staff spends on this task by half.

You can take inventories as frequently as you need to, and get access to starting, ending and used inventory by date. Best part is, the technology will automatically calculate important numbers for running your business like COGS, days on hand, and usage by day.

A restaurant inventory app can make the once-dreaded and painful task of inventory management so much quicker and easier.

It’s a no-brainer.

Don’t Ignore Inventory

As as a busy pizza restaurant manager, you grind away every day blindly assuming your operations are running smoothly.

Yet inventory mistakes are being ignored that could save the restaurant money. Not paying attention to inventory can lead to big monetary problems for your business.

The key factors for getting the most out of inventory?

Understand it’s where most of your cash sits, train your team about its importance, and use restaurant technology to make the process 10 times easier. Following these tactics will make sure your food costs stay under control.

Don’t let your business be another statistic.

Invest your time and money into proper inventory management.


About Orderly

Orderly helps independent restaurants and chains implement better processes for managing invoices, inventory, and food spend with the LEAST amount of time, effort and expense.

We’ve built the Orderly App as an easy-to-use app that helps restaurants move away from the manual, time consuming processes that exist today. The result is paperless invoicing, automated accounting, painless inventory, and food spending dashboards that help restaurants save time and save money.

Our customers are cutting their inventory time by 50%, eliminating 100% of the data entry for accounting, and reducing their quarterly food spend by thousands of dollars… all in an app that pays for itself.